\u3000\u3 Ping An Bank Co.Ltd(000001) 965 China Merchants Expressway Network Technology Holdings Co.Ltd(001965) )
22q1 net profit attributable to parent decreased by 11.7% year-on-year to RMB 1.092 billion
1) on the revenue side, affected by multiple epidemics in China, the operating revenue of 22q1 was 1.742 billion yuan, a year-on-year decrease of 10.1%.
2) the cost side is relatively rigid. The operating cost of 22q1 is 1.041 billion yuan, a year-on-year decrease of 4.1%.
3) on the profit and loss side, the national epidemic affected the company’s participation in road production, and the investment income of 22q1 was 873 million yuan, a year-on-year decrease of 9.7%.
4) on the net profit side, the net profit attributable to the parent company in 22q1 was 1.092 billion yuan, a year-on-year decrease of 11.7%; Among them, the net profit deducted from non parent company was 1.078 billion yuan, a year-on-year decrease of 11.8%. Considering the impact of local epidemic situation in the country in the first quarter of 22 years, the performance is basically in line with expectations. In addition, in terms of cash flow, due to the full payment of the income tax accrued in the previous year in the first quarter, the net operating cash flow of 22q1 decreased by 59.1% year-on-year to 303 million yuan.
The main arteries of the national trunk roads have been basically opened, and it is expected to catalyze the recovery of the main industry
As of April 25, a total of 8 expressway toll stations had been closed, accounting for 0.07%, 670 less than that on April 10; A total of 32 service areas were shut down, accounting for 0.48%, 332 less than that on April 10; Tianjin, Hebei, Shanghai, Jiangsu, Zhejiang, Fujian and other 22 provinces have launched the national unified model of key material transportation vehicle passes. Compared with the beginning of April, the main arteries of national trunk roads have been basically opened, and the rectification of excessive prevention and control problems has achieved preliminary results. The marginal improvement of management and control is expected to bring the recovery of road freight and catalyze the recovery of the main business of the company’s Road products.
The total amount of cash dividends in the past 21 years has reached a record high, and we pay attention to the room for further improvement in the future
In the 2021 annual report, the company plans to increase the total cash dividend to 2.138 billion yuan, an increase of 1.044 billion yuan year-on-year, a new high since listing, and there is room for further improvement in the follow-up. In addition to the excess growth of the company’s performance, the improvement of absolute dividend return is also attractive.
Industry policies may further catalyze, and the valuation still has room for repair
The policy side pays attention to the revision and promotion of highway related laws. In November 2021, the Ministry of transport issued the legislative plan for the 14th five year plan of transportation, requiring the highway law (Revised) to adjust and redefine the basic systems of toll road financing, construction, maintenance, operation and management, so as to realize the healthy and sustainable development of toll roads; The regulations on the administration of toll roads (Revised) are required to clarify the principles for determining the debt repayment period and operation period of toll roads, so as to prevent the risk of government debt. We judge that the new “highway law” and “charging regulations” on the policy side of the industry are expected to be promoted, or the charging period of toll roads will be extended, which will further enhance the value of the company from the perspective of DCF.
Profit forecast and valuation
On the whole, the main business of the company’s road production also has endogenous and epitaxial growth. In addition, the expansion of the industrial chain has relatively broad expansion space and output advantages. Compared with the current 22 years, PE is only 8.0 times and Pb (LF) is only 0.87 times. The valuation is low, optimistic about the steady growth of undervalued value, and the high-speed leader is stable β Medium α Properties. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 5.670 billion yuan, 6.316 billion yuan and 6.973 billion yuan respectively, corresponding to the current PE share price of 8.0 times, 7.2 times and 6.5 times respectively, maintaining the “buy” rating.
Risk warning: the road property acquisition is not as expected; Traffic growth was less than expected.
